Those looking for further proof that the Fed regional activity reports are totally bogus can find it in a pair of Fed economic reports today.
Let’s investigate the divergence between the Dallas Fed Manufacturing Survey and the Chicago Fed National Activity Index.
Dallas Fed Manufacturing Production
The survey states “Texas factory activity continued to increase in September. The production index, a key measure of state manufacturing conditions, edged down to 19.5 from 20.3 in August, indicating output grew at about the same pace as last month.”
Econoday offers this blurb:
Hurricane Harvey didn’t slow down Texas manufacturing at all based on the Dallas Fed’s September report which is led by a strong 4.3 point gain in the general activity index to 21.3 for the best result in 7 months. Readings throughout the report are far above zero to indicate robust month-to-month growth: production 19.5 in September vs 20.3 in August, new orders 18.6 vs 14.3, hours worked 18.4 vs 14.4.
Employment is a special highlight, at 16.3 vs 9.9 to indicate the sharpest rate of hiring in nearly 3-1/2 years. There is an indication of price pressures likely tied to Harvey and its effect on petroleum costs as prices paid rose to 34.9 vs 26.9 for the highest reading since July 2011.
Chicago Fed National Activity Index
Chicago Fed National Activity Index 3-Month Moving Average
Econoday Comments:
Hurricane Harvey made its effects felt in the national activity index which fell to minus 0.31 in August for the weakest showing since August last year. The 3-month average fell to minus 0.04 for only the second negative score this year. Negative readings in this broad composite are consistent with subpar economic growth.
Negative pull came especially from the production component as industrial production, hit by Harvey dislocations, showed declines for all 3 components — manufacturing, mining and utilities. Also weak was personal consumption & housing with retail sales pulled down by weak auto sales, another likely Harvey effect centered in Houston, and also housing starts where the South showed sharp Harvey-related effects.
Texas Refineries Shut
Did! Did Not!
There you have it, folks. Hurricane Harvey was very disruptive nationally, just not in the Dallas Fed region.
This curious statistic is despite the fact that Dallas Fed region refineries and chemical production plants were shut down for lengthy periods.
Mike “Mish” Shedlock
Shame on you Mish for not believing our government studies and reports as well as our highly accurate polling data. I am sure these reports give comfort to people. Get on board and drink the kook aid.
Garbage in Garbage out
TMOS tiny tiny sample … oh, and you have to have “survived” to reply.
…
The Dallas Fed began collecting TMOS data in June 2004. The original sampling frame was
drawn from Reference USA, a business database that listed over 45,000 Texas manufacturing
firms. Solicitations to participate went out to single-location companies or company headquarters in Texas; branches were excluded to avoid duplicate responses from affiliated operations. We focused on firms with more than 100 employees, although for some industries it was necessary toinclude smaller entities (Sigalla, et. al 2007).
Letters of invitation were sent to 2,500 randomly selected Texas manufacturing firms meeting
the criteria in April 2004, and executives from 130 firms agreed to participate. There were
roughly 65 to 80 survey responses each month during the first three years. The survey sample
was expanded in January 2007 with a second round of invitation letters, and smaller-scale
recruitment efforts have taken place on an ongoing basis since. As of August 2014, nearly 150
firms receive the survey, and 100 to 115 respond each month.
https://www.dallasfed.org/research/surveys/tmos/about.aspx
Excellent point
How many firms have better things to do in the wake of the hurricane?
Or, look at all this business we are doing making new stuff, construction, insurance work, importing water faucets, carpet, importing pumps, cooking Mexican food, etc.
Or, maybe those photos are from a different year.
Haven’t they been pretty bogus since about….oh I don’t know….at least the 80s?
Maybe they adjusted for the hurricane.
Good point, was that a “seasonally adjusted” time series?
Yep. In the upper right hand portion it says index, seasonally adjusted. And the Chicago one does not. Summer is hurricane season.
And, what does an index mean. I look at a wage index and have no idea what to demand for labor!
8b
Here, I couldn’t find your series but found these when looking.
https://fred.stlouisfed.org/graph/?id=PRODDUAMFRBDAL,PRODIUAMFRBDAL,
There’s always refined products in storage. The only blip I’ve seen is the rise in gasoline prices. But it looks like regular supply resumed about 7 days after Harvey:
I’d bet the places that shut down never bothered returning any information to the Dallas Fed. Therefore the Fed simply ignores those non-responses or reports them as “unchanged” since they have no evidence of reported drops.
Reblogged this on World4Justice : NOW! Lobby Forum..
The only major impact from Hurricane Harvey that I felt here in Dallas was a Labor Day gas shortage, which many say was cause by panic buying.
I wonder if all the flooding in the Houston area will cause Houstonians to move to Dallas, causing real estate values/prices here to increase even more.
Btw… some say the September nationwide increase in gas prices will positively affect the 2018 Social Security COLA.
.
“This curious statistic is despite the fact that Dallas Fed region refineries and chemical production plants were shut down for lengthy periods.”
This could be a reporting artifact, related to time. It may be that current refinery numbers are reflecting “forward” sales from earlier production. In which case, production losses from the hurricane month would show up in October or other future months. Highly unlikely that the government statistics are “real-time.”
Maybe the Russians are sending in those survey forms – just to lead the FED astray!
“…proof that the Fed regional activity reports are totally bogus can find it in a pair of Fed economic reports today.”
Yet Mish and the MSM alike will continue to post/revere these numbers religiously along with the accompanying spin language straight from the establishment spin machine.
Can we PLEASE stop behaving like there is any truth/accuracy among reported Fed & .Gov. economic/labor statistics? The worst, least credible game of charades ever played and bloggers/media sit there and bark out guesses in a voluntary echo chamber that is sealed off from reality.
Are you on drugs? If not what?
I explicitly debunked, not “revered” the MSM reports.
You prefer silence?